What is your withdrawal rate ?

[Moemg]

I just ended my first year of retirement bliss and I only withdrew 2.5 % . No ,I did not live on Ramen noodles . I travelled ,ate out ,bought presents and paid for my Mother's nurse's aide .I know some years will be a 4 % but this year wasn't .

 

[Rich_by_the_Bay]

Nice going. You must have earned yourself a comfy nest egg.

Enjoy it.

 

[RetireeRobert]

I just ended my first year of retirement bliss and I only withdrew 2.5 % .

The 2.5% SWR makes the "bliss" part twice or three times as good as just regular "bliss"! You have nicely arranged your affairs

 

[Alan]

I just ended my first year of retirement bliss and I only withdrew 2.5 % . No ,I did not live on Ramen noodles . I travelled ,ate out ,bought presents and paid for my Mother's nurse's aide .I know some years will be a 4 % but this year wasn't .

So what did you do with the 1.5% you didn't spend? Invest it in an account outside of your nest egg or leave it within your portfolio? This is something I wonder about how actual RE's practice safe withdrawals

 

[Moemg]

So what did you do with the 1.5% you didn't spend? Invest it in an account outside of your nest egg or leave it within your portfolio? This is something I wonder about how actual RE's practice safe withdrawals

Well the wild & crazy me was looking at new cars or exotic trips but the sensible me prevailed and it's safe in my portfolio !

 

[aaronc879]

Is there a down side to taking out too little from a tax deferred account. I'm thinking in terms of minimum mandatory distributions at age 70 1/2. You may be forced to take an amount that may put you in a higher tax bracket.

 

[hogtied]

2.5% - what for

Enjoy yourself, it's later than you think!

 

[Khan]

0% so far from retirement accounts; I did have to take some money from the MMA to buy a car.

 

[CyclingInvestor]

Large extra expenses in medical, travel, car replacement (not mine, but one I totalled) and taxes
on extra stock sales led to a 6% withdrawal rate in my first year of retirement. I expect to go back
to my planned 3.0 to 3.5% rate this next year, but if not, hey, that's what the extra reserves I built up
by working 2+ years longer than I needed to are for. I still have substantially more than I retired with,
and am unconcerned that my expenses were higher than expected.

 

[Bikerdude]

Withdrawal rate

4%

 

[dex]

2.46% - Year 1

 

[RedHawk]

car replacement (not mine, but one I totalled)

Were you driving the totaled car or did you hit a car ?

 

[Lsbcal]

What's to celebrate if you underspent? On the other hand, perhaps you are 23 years old and 2.5% is an appropriate level given your age, AA, etc. Nobody's gets to keep their money at the end ... er, I think that I'm right on that one. Your heirs may celibrate though.

 

[Alan]

Well the wild & crazy me was looking at new cars or exotic trips but the sensible me prevailed and it's safe in my portfolio !

I was thinking that perhaps if you kept that extra money invested outside your nest egg then if you continue to have good years you may well feel safe enough to splurge on some exotic trip or new car.

 

[heyyou]

aaron- Look into doing annual, partial Roth conversions as a way to reduce the size of your sheltered account. See Fairmark.com for details. The gov't is going to someday get its taxes from your tax-DEFERRED account.

 

[audreyh1]

Well the wild & crazy me was looking at new cars or exotic trips but the sensible me prevailed and it's safe in my portfolio !

Is it really "safe" in your portfolio? It might be better to put the excess in a cash hoard for when you are ready to spend it or have a sudden unexpected need for ready cash.

Audrey

 

[CyclingInvestor]

Were you driving the totaled car or did you hit a car ?

I was driving the totalled car, borrowed from a friend. My first at-fault accident. Insurance
covered the damage to the other car, but I paid a total of about $10k to replace the Crown
Vic I was in with an Explorer. I was hit broadside right in the drivers door by a car going
about 45-50 mph. It only gave about 6". If I had been in one of my cars (Celica, Accord,
Corolla) I probably would have been killed or badly injured, instead of suffering only a
minor neck strain.

 

[haha]

I was driving the totalled car, borrowed from a friend. My first at-fault accident. Insurance
covered the damage to the other car, but I paid a total of about $10k to replace the Crown
Vic I was in with an Explorer. I was hit broadside right in the drivers door by a car going
about 45-50 mph. It only gave about 6". If I had been in one of my cars (Celica, Accord,
Corolla) I probably would have been killed or badly injured, instead of suffering only a
minor neck strain.

OK, I am convinced. My next car will be a Crown Vic. Maybe an ex police cruiser. Glad you made out so well. Sounds really frightening though.

Ha

 

[OAG]

Actually increased the investments by 10% - so I withdrew 0% or to be more exact -10%. That is a fully Cash (Laddered CD's) and includes additional CD purchases. I have 2 COLA'd Retirement Plans (Military and SS) which are enough. Next year, 2008, will start IRA RMD for DW and may "hit" the retirement ladder to repay SSA if I go through with the "do over" plan. Current thinking is that I will do it so in the next 34 months we may have to live off of a minimal of cash withdrawals to supplement RMD and Military Retirement before taking SS again at my age 70.

 

[In-control]

Being 45 years young - 0% from my retirement account, and ~4% from my taxable accounts. So far all of my budget needs are satisfied with Interest/Dividend and Cap. gains. So I have not touched the principle of my investments or their gains.

 

[SecondCor521]

285.21%.

But I'm not retired yet ;-P

2Cor521

 

[W2R]

I'm not retired yet, but I am planning for my withdrawal rate to depend on the market.

During prolonged market "down" periods of ten years or less, I won't have to withdraw at all since I will depend on cash reserves and LBYM.

When the market recovers and is "up", I will replenish the cash reserves and then probably withdraw up to around 4% or so and cut back on the LBYM'ing! At no time would I withdraw enough for the inflation-adjusted principal to diminish.

That is the plan, anyway!! In 707 days I can ER, and at that time 'll find out how well it works for me.

 

[Moemg]

Is it really "safe" in your portfolio? It might be better to put the excess in a cash hoard for when you are ready to spend it or have a sudden unexpected need for ready cash.

Audrey

Thanks , I'm already looking at trips for next year !

 

[cute fuzzy bunny]

Ours is a not particularly scientific model.

Dividends, interest, capital gains and other income goes into the checking account. When the checking account drops below $20k, its time to slow down or stop major and unnecessary expenditures until it pops back up. When it hits $40k+ I start looking at doing major renovation projects/purchases or reinvesting the money.

 

[W2R]

Ours is a not particularly scientific model.

Dividends, interest, capital gains and other income goes into the checking account. When the checking account drops below $20k, its time to slow down or stop major and unnecessary expenditures until it pops back up. When it hits $40k+ I start looking at doing major renovation projects/purchases or reinvesting the money.

Hey, I like that method! It sounds very practical. (filing for future reference)